Consideration of Management within Virgin Group Ltd - Essay Example

Senior managers put the responsibility for the overall running of the organization in the hands of the senior management and the CEO, rather than allowing the organisation to run itself.

When Richard Branson started the Virgin Group, he would have worked with his colleagues to physically run the business, including selling goods to customers (F19), procuring supplies to sell (E15) and managing budgets (E1). As a CEO, he should be responsible for the overall management of the group. However, although he clearly undertakes some aspects of group management, such as developing and exemplifying the culture at Virgin (B9), encouraging innovation (C3) and raising additional finance for business ventures (E3), he does not get involved in the day-to-day running of the organization, even at CEO level. Branson has the ideas and the ability to spot emerging trends, but he hires the best people to analyse the situation, set up any new ventures and then run them. Such an approach allows everyone to play to their strengths while allowing Branson to live what appears to be an eccentric lifestyle involving various stunts that also allow him to promote the Virgin brand around the world. He is an unconventional CEO who carves out his own path rather than following others.

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Competitive Advantage and Management Theory

When Virgin look to enter a new market, they assess the strategies of those already present, then look to add value by focusing on quality rather than cost. Virgin Atlantic does not compete with low-cost carriers, preferring to keep costs reasonable and service exceptional. They provide additional benefits and look for synergies with other Virgin businesses. Branson looks at industry and commerce as a whole, picking out where there is poor customer service or where good customer service does not provide what customers want. This could be classified as diversification (Ansoff’s Matrix, 1988, in Johnson et al 2008) as well as “overcoming competitors’ bases of strategic advantage” (Johnson et al 2008 p.238), although this is usually associated with hypercompetitive situations and not a deliberate expansion strategy. Read More